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When Investors Subvert States

The ongoing lawsuit brought against Honduras by an American company underscores the unjust and undemocratic nature of the investor-state dispute settlement system. The Biden administration must intervene on behalf of the Honduran government and eliminate these biased and opaque corporate tribunals.

NEW DELHI – Imagine a scenario where a private company effectively creates and controls its own jurisdiction within a sovereign country. This company introduces its own currency, enacts laws, and establishes courts, prisons, police forces, and even intelligence services. It formulates its own tax, labor, and environmental regulations (or lack thereof), regardless of their compatibility with national laws.